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EU Proposes Signing VAT Cooperation Deal With Norway

by Ulrika Lomas, Tax-News.com, Brussels

30 October 2017


The European Commission on October 26, 2017, released a proposal for a EU Council decision on the signing of an administrative cooperation agreement between the EU and Norway, to support value-added tax (VAT) enforcement activities.

Negotiations on the agreement were launched in June 2015. The Commission says it will provide EU member states and Norway with a solid legal framework to combat VAT fraud and assist each other in the recovery of VAT claims.

Norway is not part of the EU. Any sale from a Norwegian business to a customer in the EU is considered an export from Norway. Norwegian exports are exempt from VAT, but local VAT is added when goods are cleared through customs in the EU state of destination. Similarly, a seller in an EU member state should not charge local VAT on goods exported to a Norwegian customer, as Norwegian VAT is added when the goods are cleared through customs in Norway.

Although different rules apply to cross-border supplies between the EU and Norway, Norway's value-added tax system is largely similar to those in EU member states and the country has also supported the EU greatly in recent years to tackle VAT fraud.

The EU hopes to negotiate more VAT administrative cooperation pacts with other third countries, being one of a number of initiatives being pursued as part of its VAT Action Plan, announced by the European Commission in April 2016 to better tackle VAT fraud and evasion.

TAGS: tax | business | European Commission | value added tax (VAT) | law | Norway | enforcement | European Union (EU) | Europe

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